Seminar Abstract

Thursday, November 20, 2008 • 3:30 PM • Medium Conference Room, SFI

James McNerney Santa Fe Institute

Soapbox Seminar - A Model of Manufacturing to Help Understand Experience Curves

Experience curves, which plot product cost against cumulative production, offer one way of viewing technological evolution. They have attracted interest because they frequently appear to follow a function in the form of a power-law. This regularity suggests the possibility of predicting future costs or deliberately driving down costs through rapid expansion of production. However, no satisfactory model has been proposed which explains the origin of the power-law or the value of its exponent. I will present a simple model of a production process which shows one mechanism by which the power-law can be obtained. The model decomposes a production process into components, and relates the exponent of the power-law to dependencies between components.

Host: Willemien Kets